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Climate Change and Cooperation in "Chindia"

The energy partnership between China and India could become a leading example of progress on climate change.

By Madhumitha MadhavanStaff Editor
May 14, 2012

China and India have positioned themselves as defenders of the global South in the international climate change arena. The climate change debate, meanwhile, is firmly centred on whose responsibility it is to clean up the mess we have made. The increasingly irrelevant debate has been polarized into a North versus South negotiation that does not seem to be doing anybody much good. For all the noise made by the United Nations Conference on Sustainable Development, to be held in June in Rio, there is no hope that anything more than an unenforceable agreement based on feeble promises. This conference has lost all of its voice in the twenty years since its original meeting, where a multitude of agreements and promises that no one had any intention of keeping were made. Meanwhile, other heads of states from Germany to Britain have dropped out of the conference all together. One last initiative the conference organizers seem to be clutching to is the role of businesses in changing the way we use the planet’s resources. Think Richard Branson’s carbon war room.

What part do developing countries have to play in this? Popular media will tell you that most of them are comprised of bustling, overcrowded cities, stifling climates, and governments that are too poor to care about the ‘white man’s burden’. But don’t believe everything you see or read. China and India might have adopted a defensive stance on almost all international climate negotiations, but what you may not know is how they are quietly, but surely, supporting innovative private sector schemes in becoming cleaner and greener. They may be competing a lot and coordinating only a little, but they are ahead of the green technology curve, essentially trying to capture rising market opportunities.

In the face of rising energy needs and soaring prices, it is no surprise that both countries would want to take advantage of all available energy in the best way possible. India and China have realized that energy security is imperative to maintaining their rates of growth. For years, the two countries had been in a competition over control of energy resources, especially oil. For example, in 2004 the two countries tried to outmaneuver each other in buying a 50 percent stake in Shell Corporation’s oil field in Angola. India offered $600 million plus $2 million in development aid; China won by offering $2 billion. What resulted was the realization that Shell had made a giant profit at the cost of the competing nations. So a partnership was formed and attempts are being made for better cooperation.

It was only natural that a partnership on energy would eventually turn into one on climate change. For years, India and China have presented a united front in various international negotiations and agreements. In 2009 they made it official and signed a Memorandum of Understanding (MOU) for exchange of views “to deepen mutual understanding, strengthen coordination and enhance cooperation.” While the MOU does no more than establish a framework for cooperation—at best a gesture of goodwill—it still has great potential.

The economic and social benefits of cooperation could be huge for both the countries. For one, they share a common and disputed border along the Himalayan foothills that is estimated by the Intergovernmental Panel on Climate Change (IPCC) to be extremely vulnerable to climate change. For another, they are both vying to harness the potential of green markets. Take, for instance, China’s ambitions in becoming a major player in the solar industry. They have already managed to reduce the price of their solar panels by 75 percent over their U.S. counterparts. Considering India’s huge potential for solar, what better market could they hope for? The Indian government, meanwhile, is harboring ambitions of emerging as a global leader in solar power generation. They not only have a Ministry of New and Renewable Energy, but have also founded the Jawaharlal Nehru National Solar Mission and are providing capital subsidies, concessional customs duty, and exemption of excise duty for solar power generation. The Chinese could be strategic partners in achieving India’s dream of generating 20,000 megawatts of grid-connected solar power by 2022.

India also has plenty to offer. The country has a burgeoning market for Energy Service Companies (ESCOs), an innovative model of providing contract based energy efficiency services for local governments and businesses. These energy saving measures are estimated to save 148.6 million tons of CO2 emissions per year. With China’s growing demands for energy, this could be a very profitable partnership.

Of course, the Chinese have invested more in capital, and the two countries do not have much in common apart from massive populations and fast growing economies. But they still have a lot to learn from each other. While climate change naysayers continue their propaganda in the United States and turn a global problem into a domestic and political debate, “Chindia” might be just the place for the emergence of profitable green technologies and markets. Someday, maybe climate change cooperation might even inspire them to find sustainable solutions to their disputed border issues.

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